Tags: home | rent | HelloWallet | buy

HelloWallet Study: Many Homeowners Better Off Renting

By    |   Wednesday, 12 November 2014 02:48 PM

Despite a shift toward renting since the Great Recession of 2007-09, many American workers still own their homes.

And a new study from Morningstar subsidiary HelloWallet says that a lot of these homeowners would be better off renting.

Currently, 65 percent of Americans own a home, and 29 percent want to own one. Only 6 percent don't own a home and don't want to own one.

"Over half of current homeowners, or over 40 million households, purchased their homes during time periods when average homebuyers would have been better off renting and investing," states the study, written by HelloWallet consumer finance expert Aron Szapiro.

"The typical median-income prospective home buyer today could generate over 50 percent more wealth over the next 10 years by renting and investing instead of buying a new home."

But what about the tax benefit of owning your home?

"Homebuyers with median incomes ($50,000) realize no federal tax benefit in 75 percent of major cities," the study states.

And what about the online calculators that people use to determine whether to buy or rent?

These tools "inflate the benefits of home buying, providing inaccurate guidance to more than 90 percent of renters considering whether to buy a home," the report says.

Meanwhile, real estate experts aren't too optimistic about the housing market's short-term strength.

The Zillow quarterly Home Price Expectations Survey shows that 40 percent of the 107 panelists don't expect the housing market to normalize for another three to five years. A total of 30 percent believe it will take one to two years, while 20 percent think it's already happened or will within 12 months.

The panelists include economists and investment strategists.

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Despite a shift toward renting since the Great Recession of 2007-09, many American workers still own their homes.
home, rent, HelloWallet, buy
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2014-48-12
Wednesday, 12 November 2014 02:48 PM
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